Apparently it seems that new auto policy 2016-21 is has made a positive impact on the automobile industry of Pakistan. Some big international players already announced their intentions to enter into Pakistan automobile industry like Audi, Volkswagen and Peugeot. On the other hand some Korean and European Car makers already joined hands with Pakistani partners.
Younus Brothers Group (Lucky Cement) has tied up with KIA Korea. Nishat Mills (Mansha Group) has announced that they have signed an MOU with Hyundai Korea. Renault France technical team has started working on the plant with Bibojee Group (Ghandhara Nissan). A part from this some Chinese automobile giants are also very active to enter in Pakistan market or enhancing their existing plant capacities.
AlHaj FAW Motors was incorporated in July 2006 and launched first product in October 2006, Started with two variants of heavy duty trucks. They had signed a distribution license agreement with FAW in July 2006, which allowed them to import, distribute and sell FAW products in Pakistan.
Initially they were importing Prime Mover in CBU condition from China. As far as marketing and sales was concern they had an edge over existing players that they have the capability to offer lease rental facility to the end customer with their own resource. This marketing tool gave their sales an immediate boost. On the other hand over all quality of FAW Trucks is also at par with their Japanese rivals. In November 2012 they established an assembly plant in Karachi and started assembly of these prime movers locally. In the year 2013 they started the assembly of 1000cc pickup and cargo vans in the same plant. Now they are going to start the assembly of SUV and Passenger Cars in this plant.
In the mean while the Government has made a change / amendment in new auto policy through SRO 483 dated 29th June, 2016 that it is compulsory every light commercial vehicle assembler has to establish ED Coat Painting system in his auto assembly plant. Now fortunately AlHaj FAW has attained that sales volume which can justify the investment cost of ED Painting System. AlHaj FAW is investing around Rupees 40/50 Crores for the establishment of ED painting system including the cost of land and material. This ED painting system shall be consists of eleven tanks and backing system can bake more than one vehicle at a time. The dipping tanks and baking ovens size is too huge that can even paint and bake Prime Movers cabin. This would be of the latest ED painting facilities in the country. Design and technology is from Korea and China. The installation and test time of this facility is around six months.
AlHaj FAW is fortunate enough that they have the back up of one of the largest automobile group of China. They are able to introduce any type of “Product Mix”. It means, light commercial vehicles, passenger cars, medium duty trucks, electric cars, hybrid cars in one time. This “product mix” give them the advantage of attaining the target of high sales volume in a short time which can easily justify the investment of Forty Crore Rupees in ED Paint Shop establishment.
The joint venture between FAW group, China and AlHaj group Pakistan, the automaker was able to launch their successful 1.3 L hatchback. FAW V2 is a good car with all the basic and some additional features which surely are lacking in our local cars.
The automaker has many different offerings in the heavy duty vehicles which include J5M 220 HP 4×2, J5M 280 HP 6×4, J5P 330HP 6×4, J5P 420HP 6×4 and FAW Tiger V. FAW Tiger V was recently launched in Pakistan and success is on its way.
In the past, when Chinese automakers came to Pakistan, they unfortunately partnered with weak groups or those who did not have a long term plan. This is what left a bad image on Chinese vehicles. It is not necessarily about the product being inferior in quality; it is just the image that created problems. But after bad experiences, Chinese companies are now smarter in picking partners.
There are many other companies who are planning to enter into Pakistan automobile market in cooperation with Chinese OEM but relatively on a smaller scale. These companies are mainly focus on light commercial vehicle segment. It may be noted that the investment cost of normal / conventional painting system is around two crore rupees. If we analyze the economic viability of these upcoming project in reference to sales / production volume and payback period of investment, one can easily understand the difference of 40 crore and 2 crore rupees. So if a new comer / investor install ED coating painting system the project will become totally unviable. In our opinion for a healthy competition “level playing field for all,” formula should be adopted. Existence of relative small companies should also be guaranteed, otherwise only big giants of the international stature will be benefitted with the new auto policy and government hopes and objectives shall not be materialized. As a result situation of unemployment will not improve. The old players of automobile industries shall maintain their monopolized stature and new big international automobile industry giants will join their “monopoly club”. Customers will suffer immensely and forced to pay huge premium money as usual.
Specially light commercial vehicles plays a pivotal role in progress of economy. They are suitable for inter city transport of goods. They are the main tool to transport agriculture goods from farms to main roads. They also use for the transportation of passenger in country side and in small towns. These are utility vehicles, do not need extraordinary cosmetics. Their main function is loading of goods, so customer wants
powerful engine and sturdy chassis.
ED (Electro deposition) Coating process actually increases the body life of the vehicle as it provides.
– Excellent resistance to corrosion.
– Realization of uniform High quality Paint coating free from Rag, Pinholes and Body rashes.
– Friendly to environment with reduced coating loss and solvent discharge.
First Automobile Works is a global contributor in the automotive industry with a 50 year history of innovation. The company FAW was established in 1953 and the name was changed to China FAW Group Corporation in 1992.